Foreign-invested enterprises and related economic organizations engaged in the buying and selling of goods are required to submit a report on their buying and selling activities to the Department of Industry and Trade as prescribed. The following are detailed instructions.
Information
Which units are required to submit reports?
The entities required to submit the report are economic organizations with foreign investment capital and economic organizations with a foreign investment ratio exceeding 51% of their charter capital (details as stipulated in Article 23 of the Investment Law) falling under the following cases:
- Foreign-invested enterprises are subject to the issuance of business licenses and retail establishment licenses as stipulated in Clauses 1 and 2 of Article 5 of Decree 09/2018/NĐ-CP;
- Organizations operating under the transitional provisions of Clause 1, Article 50 of Decree No. 09/2018/ND-CP (“Foreign-invested economic organizations that have obtained a Certificate of Business Registration, Certificate of Investment Registration, or other legally equivalent documents, a Business License, or a Retail Establishment License to conduct the buying and selling of goods and activities directly related to the buying and selling of goods before the effective date of this Decree may continue to carry out these activities under the validity of the issued documents without having to go through the procedure of obtaining a new Business License or Retail Establishment License.").
Penalize
Penalties for violations of the regulations on reporting of goods trading activities.
Common errors
Failure to implement reporting procedures.
- The Department of Industry and Trade regularly conducts inspections to ensure compliance with the law in the trading of goods and related activities of foreign-invested enterprises in Vietnam across provinces and cities. Failure to comply with reporting requirements will negatively impact the business's operations and result in administrative penalties, license revocation, and refusal to process applications.
The report is incomplete according to regulations.
- During the inspection of foreign-invested enterprises' compliance with the law regarding the buying and selling of goods and related activities, the competent authority will request the provision of complete documentation and explanations of issues related to the enterprise's operations. If the reports are incomplete, the enterprise will be required to revise them to ensure compliance with regulations and to continue to comply with the law in the buying and selling of goods and related activities.
Sanctioning of administrative violations
Imposing administrative penalties for failure to comply with reporting requirements.
In cases where foreign-invested enterprises fail to comply with reporting requirements, they may be subject to penalties as stipulated in Point c, Clause 1, Article 70 of Decree No. 98/2020/ND-CP, specifically as follows:
A fine of between 10.000.000 VND and 20.000.000 VND will be imposed. This includes violations such as failing to report, provide documentation, or explain matters related to the business's operations to the competent state management agency as required.
Business license, retail establishment license revoked.
In addition to administrative penalties, foreign-invested enterprises that fail to comply with the regulations on periodic reporting may also have their business licenses and retail establishment licenses revoked, as stipulated in Article 43 of Decree No. 09/2018/ND-CP, specifically as follows:
Business license Licenses will be revoked if the required periodic reporting requirements are not met for 24 consecutive months.
Retail establishment license Licenses were revoked in schools that failed to submit the required periodic reports for 24 consecutive months;
The application for amendment of the Business License or Retail Establishment License was rejected.
According to recent practice, when foreign-invested enterprises submit applications for amendments to their business licenses or retail establishment licenses to the Department of Industry and Trade, they are required to submit supplementary reports on their sales and related activities for the past two years. Failure to submit the required supplementary reports may result in the application being rejected, administrative penalties, or even license revocation.
This move demonstrates that the competent state authorities are tightening the enforcement of reporting obligations for foreign-invested enterprises holding business licenses or retail establishment licenses.
Perform
Procedure and method for submitting reports on goods buying and selling activities.
Execution time: Periodically, annually, before January 31st.
Receiving agency:
– Ministry of Industry and Trade: when carrying out activities
- Exercising the right to import and the right to wholesale distribution of goods such as oils and lubricants;
- Exercising retail distribution rights for goods such as rice; sugar; recorded items; books, newspapers and magazines;
- Providing logistics services; excluding sub-sectors of logistics services for which Vietnam has committed to opening up the market in international treaties to which Vietnam is a party;
- Leasing of goods, excluding financial leasing; except for leasing of construction equipment with operators;
- Providing trade promotion services, excluding advertising services;
- Providing commercial intermediary services;
- Providing e-commerce services;
- Providing services for organizing tenders for goods and services.
– Industry management department: trading in goods such as rice; sugar; recorded items; books, newspapers and magazines:
– The Department of Industry and Trade is the agency that issues business licenses and retail establishment permits.
Method of implementation:
- Submit directly;
- Submit via postal service;
- Submit online (Depending on the specific situation in each province/city, guidance will be provided accordingly).
Please refer to the latest instructions from the Ho Chi Minh City Department of Industry and Trade regarding the submission of the Report as per Notice No. 6985/TB-SCT dated November 28, 2022